The government said last month that, while it wanted to make sure customers get redress, it also wanted the motor sector to be able to continue “supporting millions of motorists to own vehicles”.
It expressed concerns at the time that the size of the compensation bill for lenders could undermine the competitiveness of UK banks.
A spokesperson for the Treasury said on Monday: “We respect the Court’s decision to not grant our application to intervene… and will monitor it closely”.
The court also rejected applications to intervene in the case from Consumer Voice, a compensation advisor, and the Finance & Leasing Association trade body.
It approved applications from the FCA and trade body the National Franchised Dealers Association.
The court’s time is limited, so it sometimes rejects interventions from parties who it believes may give similar evidence.
“It is very unusual for the government to intervene in court decisions in which it is not directly concerned, especially to pursue policy issues,” said Wayne Gibbard, who leads the automotive finance practice at law firm Shoosmiths.
He said that the Supreme Court case in April marked the final step in the legal process around “secrecy and payments”, and added that after the court’s conclusion, the FCA would consider whether, and what type of redress is paid, if at all.
“Most likely we will see that around May time, and that’s likely to involve some sort of consultation,” he said. The FCA has set itself the end of 2025 as a deadline to resolve all of the cases.
In early morning trade on Tuesday, Close Brothers Group’s share price was down around 2%, while Lloyds Banking Group was up by 0.7%. Both suffered sharp falls on Monday.
